Analyst: Walmart’s grocery plans are growing

By BILL POWER BUSINESS REPORTERPublished January 22, 2013 - 8:50pm Last Updated January 22, 2013 - 8:54pm

Average: 4.7(20 votes)

The inside of a Walmart supercentre.

Fresh groceries are coming to Walmart Canada stores in the Maritimes — in the form of new supercentres — faster and in a bigger way than originally expected, some Halifax retail analysts said Tuesday.

“At first, it sounded like Walmart would dabble with one or two stores in each of the Maritime provinces,” Pam MacFarlane, with Colliers International – Atlantic, said in an interview.

“In the Halifax area, it was clear they were bringing supercentres to perhaps Dartmouth Crossing or Bedford Common, where available parking indicates pending expansions,” said MacFarlane.

“Now there’s talk of an internal configuration of the Walmart on Mumford Road to accommodate a supercentre.”

Walmart appears to be getting more aggressive as store makeovers in the Maritimes are mapped out, she said.

“There may be more urgency with the advent of Target entering the market.” Sobeys and Atlantic Superstore, and the drugstore chains, are obvious competitors for Walmart supercentres in the Maritimes, but the big chain must also be watching the growth of small chains such as Giant Tiger, Dollarama and The Bargain! Shop stores in the region, MacFarlane said.

Walmart has been heading east with its store conversion program to accommodate fresh groceries, completing a lot of work in Quebec province last year.

The giant retail chain said Tuesday it plans to complete at least 37 supercentre conversions before the end of January 2014 and will also expand its distribution network to support expansion plans.

Some supercentres will open in the Maritimes this fiscal year, Walmart said in a news release. An exact number was not provided.

“We will have more specific information about which locations are affected later in the year,” Walmart spokeswoman Susan Schutta said in an interview.

“We may apply for a permit for a particular location, but that does not necessarily mean that location will be converted.”

Schutta said the chain must participate in the municipal approvals process and talk to contractors before deciding which projects will become part of the store conversion program.

In some cases, entirely new stores will be built, some sites will be expanded and internal reconfigurations may occur at others.

Supercentres include an entire grocery store under the roof of a Walmart featuring fresh produce, meats, baked goods and other products.

“These are absolute, bona fide grocery stores with the benefit of convenient access to the full range of Walmart retail products,” said Schutta.

Walmart has lots of work to do developing its Maritime regional distribution infrastructure to handle fresh groceries, said Dan Shaw, with the Rowe School of Business at Dalhousie University in Halifax.

“There is talk in business conference circles Walmart wants to open at least 10 supercentres in the Maritimes,” Shaw said.

Benefits to consumers will come as Walmart gets its fresh grocery distribution network functioning because that is an entirely different game than distributing general merchandise, he said.